5 Ways To Use A  Loan Against Property One Must Know

There are times when we can’t rely on our savings alone and have to look for alternate sources for immediate funds. Luckily, many financial institutions offer loans to help us during financial emergencies.

There are numerous funding options for individuals, and a LAP (Loan Against Property) is one of them. LAPs or mortgage loans are perfect for individuals requiring immediate funding. Among the loans that involve collateral, mortgage loans are widely popular in the country.

SMFG India is among the first choices of many loan borrowers looking for mortgage loans. Unfortunately, some people do not know what mortgage loans really are and consider them a debt trap. Read on to understand some lesser-known facts about mortgage loans in India.

Understanding the nature of a mortgage loan

It is essential to understand the working mechanism of the loan against property. Unlike personal loans, mortgage loans aren’t unsecured in India.

A mortgage loan will require the borrower to pledge property as collateral to the lender. Some people often think the lender will occupy the property until the loan tenure.

Contrary to this belief, loan borrowers can use the collateral property by  repaying the installments in a timely manner.  While using the property for residence or business purposes, one can secure funding with SMFG India. As soon as you apply for loan against property, the market value of the property is analysed by the lender.

Lenders tend to hang on to the property papers until the loan is cleared. Once the borrower has repaid all the installments of  the mortgage loan, the property papers are returned.

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There is no objection to the property type used to secure a loan. Individuals can use commercial or residential properties to secure loans from SMFG India.

Similar to other loans, a mortgage loan has an interest rate and a repayment tenure. Since a mortgage loan involves collateral, the interest rate is usually low.  The risk factor for the lender has been reduced as the borrower has pledged property as collateral.

Lesser-known ways to use  a LAP

A loan against property can be used for multiple reasons. Have you checked the LAP loan interest rate, and are you ready to apply? Before acquiring a mortgage loan, here are some lesser-known ways to use it:

  1. Home renovation/improvement

The value of a property will increase with time only when it is kept in the optimum condition. The market value of an old house with no renovations can be low.

The market value will significantly rise when the house is remodelled. Home renovation is a costly venture for some homeowners, and a mortgage loan can help. While living in the house, one can use it as collateral to secure some funds.

Those funds can be used for renovation, repairs, and additional installments in the house. One can also renovate a commercial property using a mortgage loan with SMFG India.

  1. Business funding

Starting a new business is not as easy as it might seem to entrepreneurs. The biggest hassle is securing funding for business operations. Often, young entrepreneurs fail to find investors who can understand their business ideas.

You can use property to secure financing if you are confident about your business idea. The lender will not ask for the entire mortgage loan at once. Instead, business owners will pay pocket-friendly EMIs to the lender and meet the business expenses simultaneously.

  1. Travel expenses
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You can apply for loan against property and plan a domestic/overseas trip with family/friends. There is no need to break your  savings  to plan a trip. A small mortgage loan will be enough to meet the travel expenses. After the trip, you can use some part of the monthly income to pay the mortgage loan EMIs.

  1. Educational expenses

People often fail to complete a course due to monetary issues. With a mortgage loan, one can complete whatever approach they like. With SMFG India, you can avail loan against property and fund your education at low interest rates without burning your pockets.  

  1. Debt consolidation

Often, people end up having multiple debts on their heads. With a single mortgage loan, all pending debts can be cleared. After that, an individual has to  pay interest charges only on a single mortgage loan.


Before pledging property as collateral, don’t forget to check the LAP loan interest rate. Some lenders might apply additional charges on mortgage loans.

However, SMFG India is trusted by many when it comes to loans against properties. Apply for a loan against property online with SMFG India now! 

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